If planned investment is sensitive to the interest rate, an increase in the interest rate causes the
A) aggregate expenditure curve to shift down.
B) aggregate expenditure curve to shift up.
C) long-run aggregate supply curve to shift out.
D) investment demand schedule to shift to the right.
Answer: A) aggregate expenditure curve to shift down.
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Jessica must choose option A or option B. Option A gives her $10,000 for sure. Option B gives her $5,000 if a fair coin toss shows heads and $15,000 if it shows tails. If Jessica is risk averse her utility of wealth curve becomes
A) flatter as her wealth increases and she will choose option A. B) flatter as her wealth increases and she will choose option B. C) steeper as her wealth increases and she will choose option A. D) steeper as her wealth increases and she will choose option B.
A crucial feature of early Keynesian business cycle theory is that real wages vary ________, which in fact ________ clearly emerge from U.S. data on wages over time
A) countercyclically, does not B) countercyclically, does C) procyclically, does not D) procyclically, does
One can argue that the average American today is "richer" than the richest American 100 years ago, given that 100 years ago,
a. people's nominal incomes were, on average, much lower than they are today. b. personal fortunes were not accurately measured. c. many of the goods and services that we now take for granted were not available. d. international trade had not yet begun to flourish.
In the long run, an expansionary monetary policy will lead to _____
Fill in the blank(s) with the appropriate word(s).